Middle East and North Africa

Low labor force participation among mothers in North Africa and the Middle East is often attributed to cultural factors independent of economic considerations. There is little evidence, however, to support or refute this view. In September 1999, the Israeli government introduced free public preschool for children aged 3 and 4. I use this policy change to estimate the effects of a reduction in child care costs on preschool enrollment, and Arab mothers' labor supply and fertility. I find that as a result of the intervention, preschool enrollment and mothers' labor supply both increased sharply. The increase in labor supply occurred mainly among more educated mothers. In spite of increasing labor force participation, the fertility of these mothers appears to have been unchanged in the short-run. There is no evidence of an effect on mothers in affected towns who did not have children of preschool age.

Out-of-school girls are among the most disadvantaged adolescents in rural Upper Egypt. Compared with girls attending school, they are more likely to be engaged in poorly paid farm work, more likely to be married early, and at greater risk for early childbearing and poor pregnancy outcomes. To respond to their situation, the Ishraq program was designed: a holistic intervention to address the unmet needs of out-of-school adolescent girls. The pilot phase of Ishraq was launched in four rural villages of one of the country's poorest regions through the partnership of Caritas, the Center for Development and Population Activities, the Population Council, and Save the Children. This research report provides data from the baseline and endline surveys conducted during the pilot.

Throughout the Middle East, unemployment rates of educated youth have been persistently high and female labor force participation, low. This paper studies the impact of a randomized experiment in Jordan designed to assist female community college graduates find employment. One randomly chosen group of graduates was given a voucher that would pay an employer a subsidy equivalent to the minimum wage for up to 6 months if they hired the graduate; a second group was invited to attend 45 hours of employability skills training designed to provide them with the soft skills employers say graduates often lack; a third group was offered both interventions; and the fourth group forms the control group. The analysis finds that the job voucher led to a 40 percentage point increase in employment in the short-run, but that most of this employment is not formal, and that the average effect is much smaller and no longer statistically significant 4 months after the voucher period has ended. The voucher does appear to have persistent impacts outside the capital, where it almost doubles the employment rate of graduates, but this appears likely to largely reflect displacement effects. Soft-skills training has no average impact on employment, although again there is a weakly significant impact outside the capital. The authors elicit the expectations of academics and development professionals to demonstrate that these findings are novel and unexpected. The results suggest that wage subsidies can help increase employment in the short term, but are not a panacea for the problems of high urban female youth unemployment.

Intervention settings: Mixed.

Intervention description: Awarded voucher to pay employer subsidy equivalent to minimum wage for up to 6 months, if graduate is hired. Invited to attend 45 hours of employability skills training designed to provide them with soft skills.

Methodology: RCT.

Sample: Young women college graduates.

Findings: Job voucher led to a 40 percentage point increase in employment in short-run, but most employment is not formal. Average effect is smaller and no longer statistically significant 4 months after the voucher period has ended.

Microcredit has rapidly expanded in the past years, providing access to financial services to a large population previously excluded from the financial system. However, whether it helps the poor has been a subject of intense debate on which, until very recently, there was no rigorous evidence. This paper reports the results of a randomized experiment designed to measure the impact of microcredit in rural areas of Morocco. Within the catchment areas of new MFI branches opened in areas that had previously no access to microcredit, 81 pairs of matched villages were selected. The treatment villages, randomly selected within each pair, were offered microcredit just after Al Amana opened the branch, while the control villages were offered access only two years later. Al Amana program increased access to credit significantly. Its main effect was to expand the scale of existing self-employment activities of households, for both non-livestock agriculture and livestock activities. We find little or no effect on average consumption as well as on other outcomes such as health, education, etc. However, treatment effects are heterogeneous depending on whether the households had an existing self-employment activity at baseline. Households that had a pre-existing activity decrease their non-durable consumption and consumption overall, as they save and borrow to expand their activities. Households that had not a pre-existing activity increase food and durable expenditure and no effects on business outcomes are observed.

Intervention settings: Rural

Intervention description: A randomly selected half of 82 paired villages in the catchment areas of newly opened microfinance branches with no previous access to microcredit were offered microcredit (group liability loans), with the remaining villages receiving the same offer two years later.

Methodology: RCT

Sample: 4,495 households in 80 pairs of villages.

Findings: 13% increase in HH having a microfinance loan in the treatment villages. Both livestock and non-livestock agricultural activities expanded in the treatment villages (limited to households with a business activity pre-intervention). No effect on average household consumption, poverty or on other outcomes such as health and education. The majority of borrowers were men, and there was no measurable effect on women's empowerment.

Impact of Microcredit in RuralAreas of Morocco: Evidence from a RandomizedEvaluation

Crèpon et al (2011)

Original Abstract:

Microcredit has rapidly expanded in the past years, providing access to financial services to a large population previously excluded from the financial system. However, whether it helps the poor has been a subject of intense debate on which, until very recently, there was no rigorous evidence. This paper reports the results of a randomized experiment designed to measure the impact of microcredit in rural areas of Morocco. Within the catchment areas of new MFI branches opened in areas that had previously no access to microcredit, 81 pairs of matched villages were selected. The treatment villages, randomly selected within each pair, were offered microcredit just after Al Amana opened the branch, while the control villages were offered access only two years later. Al Amana program increased access to credit significantly. Its main effect was to expand the scale of existing self-employment activities of households, for both non-livestock agriculture and livestock activities. We find little or no effect on average consumption as well as on other outcomes such as health, education, etc. However, treatment effects are heterogeneous depending on whether the households had an existing self-employment activity at baseline. Households that had a pre-existing activity decrease their non-durable consumption and consumption overall, as they save and borrow to expand their activities. Households that had not a pre-existing activity increase food and durable expenditure and no effects on business outcomes are observed.

Intervention settings: Rural.

Intervention description: Group-liability credit.

Methodology: RCT, tested impact of new MFI branches and rigorous.

Sample: Majority are poor men; small sub-sample of poor women.

Findings: Increased revenues, profits and number of employees of clients' existing non-livestock agricultural businesses (no impact on non-agricultural enterprises).Expanded scale of existing HH self-employment activities. No impact on new business creation or hours spent in self-employment. Higher earnings from business offset by lower income from wage labor. No significant impact on total per capita expenditure (point estimate negative). Mixed results on HH entrepreneurial engagement: positive impact on scale of activities, and in revenues/income from non-livestock agricultural activity only. No impact on women's empowerment; poverty or average per capita short-term consumption; HH likelihood of starting a new business; number of HH activities managed by women, women's decision-making power within HH or women's mobility. Lower earnings from wage labor, suggesting lower labor supply into wage-work.

In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquee were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates optimism toward the future shortly after the Tunisian revolution.

Intervention settings: Urban

Intervention description: Entrepreneurship track where students received business training, personalized coaching, and supervision in development and finalization of business plan. Option of possibility to join business plan competition.

Methodology: RCT

Sample: 1,499 non-poor university graduates, both male and female.

Findings: 6% increase in self-employment rates of males and 3% for females after one year. Program fostered business skills, expanded networks and affected a range of behavioral skills. Participation heightened graduates' sense of opportunities and optimism for the future.